When the FBI Comes Calling…®
UNITED STATES JURISDICTION (continued)
Interstate or Foreign Commerce
18 U.S.C. § 10 (2005).
"Interstate commerce" is defined in section 10 as including commerce between one State, Territory, Possession, or the District Columbia and another State, Territory, Possession, or the District of Columbia. "Foreign Commerce" is defined as including commerce with a foreign country. 18 U.S.C. § 10. Note, however, that commerce does not require goods to be sold or persons to be hired out. See Whitaker v. Hitt, 285 F. 797, 799 (D.C. Cir. 1922). Furthermore, so-called "cruises to nowhere" do not constitute foreign commerce. See United States v. Montford, 27 F.3d 137, 139 (5th Cir. 1994) (where gambling vessel "had no contact whatsoever with a foreign country or waters within the jurisdiction of a foreign country, and indeed no such contact is intended," foreign commerce is not involved.). But see Casino Ventures v. Stewart, 183 F.3d 307, 311 (4th Cir. 1999) ("Cruises to nowhere remain a federal crime if a state 'has enacted a statute the terms of which prohibit' the use of gambling devices on such cruises.").
United States v. Tarkoff, 242 F.3d 991 (11th Cir. 2001).
One particular case that highlights the reach of the United States and its ability to regulate foreign commerce is United States v. Tarkoff, 242 F.3d 991 (11th Cir. 2001). Tarkoff deals with "whether a defendant may be convicted for conspiring to violate and violating the money laundering statute, 18 U.S.C. § 1956(h) and (a)(1)(B)(i), where the indictment charged and the government proved that the two monetary transactions at issue occurred wholly outside the United States." Tarkoff at 991-92. The defendant was convicted for his participation in two transactions in contravention of the money laundering statute: 1) the wire transfer of $400,000 from Curacao to a bank account in Israel, and 2) the transfer of $50,000 of those funds to the defendant's Israeli bank account. Id. at 993. The defendant challenged the conviction on the grounds that the transactions in which he took part occurred wholly outside the United States, and therefore "did not affect interstate or foreign commerce, which is a necessary component of an element of the money laundering statute under which he was convicted." Id.
The discussion hinged upon the statutory definition of "financial transaction" which is defined at 18 U.S.C. § 1956(c)(4) as "(A) a transaction which in any way or degree affects interstate or foreign commerce (i) involving the movement of funds by wire or other means or (ii) involving one or more monetary instruments …, or (B) a transaction involving the use of a financial institution which is engaged in, or the activities or which affect, interstate or foreign commerce in any way or degree." Tarkoff at 994 (quoting 18 U.S.C. § 1956(c)(4). Relying on an earlier case, United States v. Kramer, 73 F.3d 1067 (11th Cir. 1996), in which the court reversed a money laundering conviction because that defendant participated only in a transfer of money from Switzerland to Luxembourg and not a transfer of money to or from the United States, the defendant in Tarkoff argued that since the two transactions occurred wholly outside the United States, they were not financial transaction under section 1956(c)(4). Id. The court, however, distinguished the two cases, noting that the Kramer defendant was charged with money laundering under 18 U.S.C. § 1956(a)(2)(B)(i), which specifically requires a transfer of funds to or from the United States, while the Tarkoff defendant was convicted of violating 18 U.S.C. § 1956(a)(1)(B)(i), which provides that the defendant can be convicted so long as he was involved in a "financial transaction." Id.
The court, furthermore, notes that there are two ways to establish that a defendant conducted a financial transaction. The government must prove either "(1) that [the defendant] participated in a transaction that in any way or degree affected interstate or foreign commerce and involved the transfer of funds or the use of one or more monetary instruments, or (2) that [the defendant] participated in a transaction that involved the use of a financial institution that was engaged in, or the activities of which affected, interstate or foreign commerce in any way or degree." Id. (emphasis in original). The government argued, and the court agreed that this was proven in two separate ways: the first, that the defendant traveled from the United States to Israel to conduct business with a bank there which required telephone communication between Israel and Miami, and between Miami and Curacao, to arrange for the funds transfer from Curacao to Israel, since that affected foreign commerce "in any way or degree"; and second, alternatively, the transactions involved the use of an Israeli bank, which was a "financial institution that was engaged in, or the activities of which affected, foreign commerce in any way or degree" by virtue of it communicating with parties in the United States and providing banking services to United States citizens. Id. at 995.
The decision is worded loosely enough to allow the United States to expand its jurisdiction to a very wide set of individuals and acts. Furthermore, given money laundering's linkage to international terrorism, aggressive prosecutions of money launderers across the globe is not inconceivable as long as the United States is somehow affected. See generally, Marian Hagler, International Money Laundering and U.S. Law: A Need to "Know-Your-Partner," 31 SYRACUSE J. Int'l L. & Com. 227 (2004); Walter Perkel, Note: Money Laundering and Terrorism: Informal Transfer Systems, 41 AM. CRIM. L. REV. 183 (2004).
18 U.S.C. § 5 (2005).
The term "United States," "includes all places and waters, continental or insular, subject to the jurisdiction of the United States, except the Canal Zone." 18 U.S.C. § 5.